M/s. Vodafone Mobile Services Limited, vs. Assistant Commissioner of Income Tax,

ITTA/281/2018HC TelanganaHBHC01048481201803 September 2024Bench: SUJOY PAUL,NAMAVARAPU RAJESHWAR RAO4 pages

AI SummaryAllowed

What did the High Court hold?

The High Court of Telangana at Hyderabad, comprising Hon'ble Justice Sujoy Paul and Hon'ble Justice Namavarapu Rajeshwar Rao, allowed the appeal. The Court noted that both the appellant (assessee) and the respondent (revenue) agreed that the singular point involved in the matter was covered by the judgment of the Hon'ble Supreme Court in Bharati Cellular Ltd. v. Assistant Commissioner of Income Tax. The assessee's contention was that the activity in question was a 'sale', while the revenue treated it as 'commission'. Since the Supreme Court had decided this point in favor of assessees, the High Court found no reason to deviate. Consequently, the impugned order of the ITAT was set aside. The appeal was allowed without costs. Any pending interlocutory applications were also closed.

What were the facts?

The assessee, M/s. Vodafone Mobile Services Limited, formerly M/s Vodafone South Limited, filed an appeal before the High Court of Telangana at Hyderabad. The appeal was against an order dated 30-05-2018 passed by the Income Tax Appellate Tribunal (ITAT), Hyderabad Bench - B. This ITAT order was in relation to ITA No. 411/Hyd/2018 for the assessment year 2016-17. The ITAT order itself was preferred against an order dated 30-11-2017 passed by the Commissioner of Income Tax (Appeals)-8, Hyderabad, which in turn was against an order dated 27-02-2017 passed by the Assistant Commissioner of Income-Tax, TDS Circle-2(1), Hyderabad. The dispute concerns the classification of an activity as 'sale' versus 'commission'. An interlocutory application (IA No: 2 of 2018) was also filed seeking a direction to the respondent not to take coercive steps for recovery of the balance alleged demand pending the appeal.

What were the issues?

1. Whether the activity in question is to be treated as a 'sale' or 'commission' for the purpose of income tax, under the relevant provisions of the Income Tax Act, 1961. The assessee contended that the activity in question is a 'sale'. They relied on the judgment of the Hon'ble Supreme Court in Bharati Cellular Ltd. v. Assistant Commissioner of Income Tax. The assessee argued that this Supreme Court decision has settled the issue in favor of assessees, making the matter no longer 'res integra'. The revenue, represented by the Assistant Commissioner of Income-Tax, fairly submitted that the singular point involved in the matter is indeed covered by the aforementioned judgment of the Hon'ble Supreme Court in Bharati Cellular Ltd.'s case.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

l34',t1l IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD TUESDAY, THE THIRD DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRIJUSTICE NAMAVARAPU RAJESHWAR RAO INCOME TAX TRIBUNAL APPEAL NO: 281 OF 2018 lncome Tax Tribunal Appeal Under Section 260 A of the lncome Tax Act 196't against the order dated 30-05-2018 in ITA No. 41lHyd/2018 on the file of the lncome Tax Appellate Tribunal Hyderabad Bench - B, Hyderabad in for assessment Year 2016-17 preferred against the Order dated 30-1 1-2017 on the file of Commissioner of Income Tax (Appeals)-8, Hyderabad ITTA.No. 0296/ClT(A)-BlHydl2016-17 preferred against the Order dated 27-02-2Q17 onthe file of the Assistant Commissioner of lncome-Tax, TDS circle-2('l ), Hyderabad. Between: M/s. Vodafone Mobile Services Limited,, (Formerly M/s Vodafone South Limited), 1-10-178, Varun Towers - ll,6th Floor, Begumpet, Hyderabad - 500 016, Telangana. AND lA NO: 2 OF 2018 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the Respondent not to take any coercive steps for the recovery of the balance alleged demand, pending disposal of the above appeal. Cbunsel for the Appellant : Sri A V A Siva Kartikeya Counsel for the Respondent: Sri A Rama Krishan Reddy representing Sri A. Radha Krishna The Court delivered the following: Judgment ...AppellanUAppellant Assistant Commissioner of lncome Tax, TDS Circle - 2(1), Hyderabad, 4th Floor, A - Block, I.T. Towers, A.C. guards, Hyderabad - 500 004, Telangana. ...RespondenU ResPondent

THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE SRI JUSTICE I{AMAVARAPU RA"'ESHWAR RAO I.T.T.A. No.281 0F 2018 JUDGMENT: (per Hon'ble Justice Sujog Paul) SriA.V.A.SivaKartikeya,learnedCounselfortheappellant, Sri A.Rama Krishna Reddy, learned counsel representing Sri Radha Krishna, learned counsel for the respondent' 2. With the consent, finallY heard' 3.Learnedcounselfortheappeilant'attheoulset'bypiacing reliance on the judgment of Hon'ble Supreme Court in Bharati Cellular Ltd., v. Assistant Commissioner of Income TaxL submits that singular point involved in this matter is no more res integra and curtains are frnally clrawn by the Hon'blc Supreme Court in the said case. It is submitted that the stand of the petitioner was tl)c activity in question is a sa1e, whereas the responclents are treating it to be 'commission". Since, the Hon'ble Supreme Court has dt:cided the aforesaid poin*. in favour of assessees, the impugned order rnay be set aside. for the respondent fairly submitted that indeed covered by the recent ju<lgment 1n Bharati Cellular Ltd's case suPra' 4. Learned counsel singular point above 5 Resultantly, the impugned order is set aside ' ' eozqlqaz lrR 247 (sc)

2 6. Accordingly, the Appcal is allowed. No costs. Interlocutory .. applications, if any pending, shall also stand closed sd/- A.v.s.s.c.s.M. MA JOINT REGIS R //TRUE COPY// SECTION OFFICER To, 1. The lncome Tax Appellate Tribunal Hyderabad Bench - B' Hyderabad 2. The Commissioner of lncome Tax (Appeals)-B' Hyderabad , . 5. fft" Assistant Commissioner of lncome-Tax' TDS circle-2(1)' Hyderabad + On" CC to Sri A V A Siva Kartikeya, Advocate [OPUC] 5. One CC to Sri Radha Krishna, Advocate [OPUCI 6. Two CD CoPies ADI(gh Y4-

HIGH GOURT DATED:0310912024 JUDGMENT ITTA.No.281 of 2018 ALLOWING THE ITTA WITHOUT COSTS fr t ttrit, 2x*, ai .\ ,/ <+,// t tt,l * ;7 -:-;-.-' /"t' l-)t" lr L \,2 \\ IE i4 c t \""'1 , .- --.:- g(9d4 X6. i I

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